Weakness Seen in CUI Global (CUI) Estimates: Should You Stay Away? - Tale of the Tape
April 17 2014 - 08:58AM
Zacks
Similar to wise buying decisions,
exiting certain underperformers at the right time helps maximize
portfolio returns. Selling off losers can be difficult, but if both
the share price and estimates are falling, it could be time to get
rid of the security before more losses hit your portfolio.
One such stock that you may want to consider dropping is
CUI Global, Inc. (CUI), which has witnessed a
significant price decline in the past four weeks, and it has seen
negative earnings estimate revisions for the current quarter and
the current year. A Zacks Rank #4 (Sell) further confirms weakness
in CUI.
A key reason for this move has been the negative trend in earnings
estimate revisions. For the full year, we have seen 3 estimates
moving down in the past 30 days, compared with no upward revision.
This trend has caused the consensus estimate to trend lower, going
from 32 cents a share a month ago to its current level of 22
cents.
Also, for the current quarter, CUI has seen 3 downward estimate
revisions versus no revision in the opposite direction, dragging
the consensus estimate down to loss of 1 cent a share from earnings
of 1 cent over the past 30 days.
The stock also has seen some pretty dismal trading lately, as the
share price has dropped 15.37% in the past month.
So it may not be a good decision to keep this stock in your
portfolio anymore, at least if you don’t have a long time horizon
to wait.
If you are still interested in the Electrical Semiconductor sector,
you may instead consider some better-ranked stocks including
Advanced Micro Devices, Inc. (AMD),
Freescale Semiconductor, Inc. (FSL) and
Rambus Inc. (RMBS). All these stocks hold a Zacks
Rank #1 (Strong Buy) and may be better selections at this time.
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